Latta v. Sovereign Camp, W. O. W.

March 2, 1936. The opinion of the Court was delivered by This action by the plaintiff, A.L. Latta, against the defendant, Sovereign Camp, Woodmen of the World, was commenced in the Court of Common Pleas for Chesterfield County, January, 1933. In his complaint the plaintiff sets up two causes of action. In the first cause of action he alleges the fraudulent cancellation by the defendant of a policy for $2,000.00, issued by the defendant on the life of the plaintiff, June 25, 1929; and in the second cause of action he alleges the wrongful retention of premiums and refusal to allow plaintiff the cash surrender value of the policy. Actual damages, in the sum of $2,000.00, and punitive damages, in the sum of $500.00, are asked for. In answering the complaint the defendant denies all liability thereunder and alleges that the policy in question was forfeited for nonpayment of premiums, alleging further that the policy in question could be reinstated only upon plaintiff furnishing evidence of insurability, which the plaintiff was unable to do. Defendant further alleges in its answer: "That by the terms of the policy there were no cash surrender values, paid up insurance or extended insurance, until thirty-six monthly payments had been made thereon, and that plaintiff had not made the required number of payments prior to his premium default." The answer of the defendant also denies "wrongful cancellation of the policy or retention of premiums and alleged that defendant had acted only in accordance with its constitution, by-laws and the certificate of insurance."

The case was tried at the July, 1931, term of said Court before his Honor, Judge E.C. Dennis, and a jury, and resulted in a verdict for the plaintiff in the sum of $2,000.00 actual damages, and $500.00 punitive damages.

Motion by the defendant for a new trial being refused by the trial Judge, upon judgment entered on the verdict, the defendant has appealed to this Court.

The allegations of error imputed to the trial Judge by the defendant are set forth under ten exceptions but, in the appellant's brief, filed with this Court, counsel for appellant states that there are only three questions involved in the appeal, namely:

"1. The plaintiff admittedly being in default so as to suspend the policy under the terms and conditions of the policy, constitution and by-laws of the association, was there a breach of contract by defendant?

"2. Was there sufficient evidence of a fraud to support a verdict for punitive damages?

"3. Was there proof of actual damages, and was the verdict excessive?"

As to Question No. 1, we deem it sufficient to state that, in our opinion, considering the testimony as a whole, this Court cannot hold, as a matter of law, that the plaintiff was in default, so as to give to the defendant the right to cancel the policy in question. Under our view of the record, more than one reasonable inference can be drawn from the testimony bearing on this question. Considering the testimony as a whole, we think it may be reasonably inferred therefrom that the defendant, through its legal agents, prevented the plaintiff from making the required payments, by refusing to accept the money which the plaintiff paid to the defendant's duly authorized agent, and that the defendant issued vouchers returning some of the money. In this connection we call attention to a letter written by the president of the defendant company, dated January 3, 1933, addressed to Mr. George M. Walters, Deputy, Woodmen of the World, Cheraw, S.C. in which he stated that the plaintiff was entitled to be reinstated. The president of the Sovereign Camp, Woodmen of the World, is presumed to have understood all of the rules and requirements governing the policy in question, and it was proper for the jury to consider the letter in connection with the other testimony offered, bearing on the question. We think his Honor, the trial Judge, properly refused the motion for direction of a verdict and was right in submitting to the jury the question involved.

As to the second question, "Was there sufficient evidence of a fraud to support a verdict for punitive damages?" we think there was some evidence tending to support this alleged fact. There was testimony tending to show that the defendant intentionally devised a plan to cancel the policy in question. It was, therefore, proper to submit to the jury the question as to punitive damages. In this connection we quote the following testimony bearing on this question:

"Q. In response to that meeting between Mr. Walters and Mr. Bradshaw in Columbia, what happened to you in Cheraw; did somebody come to see you? A. Yes, but I don't remember his name.

"Q. But he was from the Woodmen of the World? A. Yes.

"Q. State whether or not you had a visit from him. A. I had a visit in Mr. R.E. Hanna's office in Cheraw by an official of the Woodmen of the World.

"Q. What did this official state to you? A. We had this meeting, and he was very sorry that this had happened and he came there thinking that he could straighten it up in some way, but he went on to state that it was customary, after insurance companies found out that they had a bad risk, to ease him out in some way. He had several forms, which he explained, and that I had to get one of those forms. That was the impression I got from him.

"Mr. Nock: I move to strike out the impression.

"Q. State what he stated to you as insurability.

"Mr. Nock: I object to this until the identity of this person is fixed, in view of the strict provisions of waiver.

"The Court: You don't know his name?

"Mr. Hanna: We made a record of it, but haven't got it here. He came in response to this meeting between Mr. George Walters and Mr. Bradshaw, in Columbia.

"The Court: I will let him go ahead and say what the man said; but not the impression of what he said.

"A. This official stated that all the insurance companies, when they found out they had a bad risk, would go to every part of the policy purposely to cancel this insurance, and that one method they had was to write this fellow to know if he wanted free medical examination and, if so, to give them a specimen of his urine, and if they found he was in bad shape they would find some plan to cancel it; and that they would send out a blank asking if you wanted additional insurance without medical examination just to sign the dotted line, as I did, and if they found out I was physically unable to get insurance they would cancel the policy.

"Cross-Examination "By Mr. Nock:

"Q. Mr. Latta, do you remember the date on which you made payment of your November, 1931, dues? A. No, Mr. Huey's books will show it, I suppose.

"Q. In response to this letter of January 25, 1933, that has been read you were offered reinstatement if you would pay your unpaid premiums, and you made no offer to them to pay those premiums in any way, did you? A. Yes.

"Q. In what form? A. That question, asking them if they would loan me the money to pay the premiums, and they wrote me that I had no policy.

"Q. They wrote you that it had no loan value? A. That is correct; that it had lapsed.

"Q. And you didn't get it from any other source, did you? A. No.

"Q. And you do not want to reinstate it now? A. I am not able to do it now; it costs too much now."

This testimony, considered in connection with the other testimony in the case, in our opinion, tends to support respondent's position that there was sufficient evidence of fraud to support a verdict for punitive damages.

The following is the third question presented by the appellant: "Was there proof of actual damages and was the verdict excessive?" This question is based on Exceptions 4 and 10, reading as follows:

"4. That the Court erred in refusing the defendant's motion for a directed verdict because there was no proof of actual damages sustained by the plaintiff."

"10. That the Court erred in refusing the defendant's motion for a new trial on the grounds that the verdict was excessive, the error being that there was no legally sufficient evidence to support the finding of $2,000.00 actual damages."

We think the evidence amply sufficient to support a verdict for actual damages, and therefore think that his Honor, the trial Judge, properly submitted that issue to the jury. However, in our opinion, the evidence is not sufficient to support a verdict for actual damages in the sum of $2,000.00, the amount found by the jury. The rule governing the case as to actual damages is stated in the case of Pack v.Metropolitan Life Insurance Company (S.C.),182 S.E., 747. By reference to the opinion in that case, it will be seen that the measure of actual damages in such case is the sum of the premiums which have been paid by the insured, and loss by the lapse or cancellation of the policy in question, and the damages the plaintiff has sustained by such lapse or cancellation, by ascertaining the insured's life expectancy and the amount he would be required to pay for insurance of like character during such period. But, as held in thePack case, the amount which the plaintiff is now entitled to recover could not be equal to the amount of the lapsed or cancelled policy. We may add, however, that the jury may take into consideration any special damages established in the matter by the plaintiff and in this connection may take into consideration the fact, if it be a fact, that the plaintiff is not now in a physical condition to procure additional or other insurance, and is not likely to be in a physical condition to procure additional or other insurance. It is proper for the jury to ascertain these values. Therefore, the case will have to be reversed and remanded for a new trial. In this connection we may state that we also think it proper for the jury that passes upon the question of actual damages to also pass upon the question of punitive damages.

It is, therefore, the judgment of this Court that the judgment of the lower Court be, and the same is hereby, reversed, and the case remanded for a new trial in accordance with the views herein expressed.

MR. CHIEF JUSTICE STABLER and MR. ACTING ASSOCIATE JUSTICE G.B. GREENE concur.

MR. JUSTICE BONHAM and MR. ACTING ASSOCIATE JUSTICE WILLIAM H. GRIMBALL dissent.